Continuing to learn about culture from Toyota
An interesting McKinsey piece, by a retired CEO of Toyota in Canada, makes some interesting points about effective leadership. (Still) Learning from Toyota includes reflections on how Toyota implemented and obtained success from the Lean methodology. But in the process it makes points that apply whether you are using Lean or not.
Here are a few excerpts (emphasis added):
- The reality is that many senior executives—and by extension many organizations—aren’t nearly as self-reflective or objective about evaluating themselves as they should be. A lot of executives have a propensity to talk about the good things they’re doing rather than focus on applying resources to the things that aren’t what they want them to be.
- What happens in Toyota’s culture is that as soon as you start making a lot of progress toward a goal, the goal is changed and the carrot is moved. It’s a deep part of the culture to create new challenges constantly and not to rest when you meet old ones. Only through honest self-reflection can senior executives learn to focus on the things that need improvement, learn how to close the gaps, and get to where they need to be as leaders.
- A self-reflective culture is also likely to contribute to what I call a “no excuse” organization, and this is valuable in times of crisis. When Toyota faced serious problems related to the unintended acceleration of some vehicles, for example, we took this as an opportunity to revisit everything we did to ensure quality in the design of vehicles—from engineering and production to the manufacture of parts and so on. Companies that can use crises to their advantage will always excel against self-satisfied organizations that already feel they’re the best at what they do.
- Senior executives who are considering lean management (or are already well into a lean transformation and looking for ways to get more from the effort and make it stick) should start by recognizing that they will need to be comfortable giving up control.
- ….there’s ultimately no such thing as perfection. There’s always another goal to reach for and more lessons to learn.
I was fortunate to work at a company, Solectron, that adopted Lean. I know that it can work and provide huge benefits, whether in manufacturing, finance, or internal audit.
I like several things about these messages. An effective culture is about far more than ethics and compliance. It includes:
- The ability for everybody to contribute to the performance of the organization without being dominated by the executive team. Leaders can and should come from every corner of the organization, but have to be freed of the chains of structure, position, and rank.
- A desire to continuously improve, not occasionally, but all the time. Kaizen is not something you “do”, it is a cultural philosophy.
- A shared commitment to excellence in performance, quality, and efficiency.
- Knowing when to invest scarce resources, and being willing to change what has worked in the past because it may not be best for the future.
- Embracing innovation, whoever’s idea it is.
- The ability to learn from and take advantage of setbacks, rather than always trying to pin the blame on a culprit.
- There’s no reason why people cannot enjoy their work.
When governance, risk, information security, internal audit and other practitioners focus exclusively on culture being about ethics and compliance, it can come at the expense of performance.
A focus on not doing wrong can inhibit the ability to do what is right. It can make an organization excessively risk averse.
When you consider culture, are you only thinking of ethics and compliance or are you looking at what it takes to be successful?
I welcome your thoughts and comments.